Building an extension or covering the loft could increase the value of a home by almost a quarter, according to Nationwide Building Society research.
The country’s largest mutual has changed its mortgage proposition for further advances.
Nationwide offers access to its full range of mortgage deals with a 0.10 percentage point discount for existing customers. Rates start at 3.19% for a two-year fixed rate (60% LTV).
Later in September, borrowers who use a FlexAccount as their main current account will also have access to Nationwide’s four-year fixed rate Flexclusive mortgage from 2.99% (60% LTV) and five-year tracker Flexclusive mortgage from 3.49% (70% LTV) for further borrowing.
Nationwide’s House Price Index Special Report found that creating an extra bathroom could add 6% to the value, while adding another double bedroom can push up the value by 12%.
Building an extension or loft-conversion to create a double bedroom and en-suite bathroom could add 23% to the value, and increasing floor space by 10% can add 5% to the average value.
The price for building an extension can cost, on average, around £1,000 per m2 or £23,0003 for a single storey and £76,0004 for a double storey.
In London, moving from a three bedroom to a four bedroom property carries a £90,000 premium on average, the Nationwide said.
“With housing market demand still very weak, increasing numbers of homeowners may opt to improve rather than move,” said Robert Gardner, Nationwide’s chief economist. “Our research assesses the factors that affect the value of homes, and the potential to add value.
“Having more useable space is generally thought to be consistent with better quality accommodation and people are prepared to pay for it. A 10% increase in floor space, other things equal, adds 5% to the price of a typical house, while adding space equivalent to the size of a double bedroom to a two bedroom house can add around 12% to its value.
“A second bathroom is also a favourite with homeowners and our research shows that creating an additional bathroom can add 6% to the value of the average house. Homeowners that add a loft conversion or extension incorporating a double bedroom and a bathroom can add about 23% to the value of an existing three bedroom, one bathroom house.”
